August 9, 2010

The ‘rights centred’ approach that the previous UPA government experimented with, with national rural employment guarantee act, has led to an economic and social transformation of sort. Implementation of the schemes following this Act [NREGS] leaves much to be desired, but without doubt the scheme has -

Flushed enormous funds into rural and semi-urban areas;

Brought employment to people near their homes and thus substantially reduced seasonal or perennial migration to big cities;

Made the unorganised labour more assertive in demanding wages for the work done whether under NREGS or otherwise;

Reduced the cost competitiveness and profit of enterprises that depend on cheap labour;

Increased the purchasing power of the rural poor and thus empowered them in various ways;

Created more demand for goods in rural areas, creating more jobs indirectly; and

Created all sorts of pits and mounds and sometimes useful assets such as bridges, river embankments and reservoirs.

Wherever the real poor are getting employment for a good part of the year, fair wages and subsidised food from the Public Distribution System [PDS], the newfound security has the potential of eradicating poverty in a short time. The money the family earns should remove the compulsion to put children on menial jobs and give a sense of security that can spur savings. Theoretically, it would lead to lesser malnutrition and ailments, children going to school, women looking after themselves better, less indebtedness and less dispossession of land needed for repayment of loans. In practice, there are many many gaps. But we are not talking right now about implementation.

On the negative side, because of the money that is flowing into villages and small towns, new forms of tension are rising. There are many fake wage earners, and a good number of genuine poor are denied work due to caste or other considerations leading to disenchantment among those denied jobs. A part of the money that is coming ‘cheap’ to the household is getting diverted to country-made liquor shops. Contracts for various types of work are cornered by the progeny of village heads, revenue clerk etc who are emerging as the new generation of strongmen. While the wage earners are learning to raise their voice, these new youth with easy money are intolerant of such ‘rebellion’ by the erstwhile oppressed people. Though no documentation or proof of this is still available, this new money must be generating a new breed of thieves and brigands in villages.

It is also reported from many parts of the country that labour for farming is becoming scarce due to NREGS. In some places, labourers have started sort of blackmailing when they find that the job is critical [like paddy transplantation and crop harvesting] and no other labour is available.

An economic intervention of this type is always prone to have negative side effects, but let’s hail it. After the Integrated Rural Development Programmes [IRDP] that ran in the earlier two decades, this is the largest scheme the government ever started for the rural poor. It is better in at least two respects - one, it lands money directly in the hands of the poor, and two – it gives a sort of job security to the poor.